Friday, September 6th 2013 - 01:42 UTC

Debt-struck Madrid believes its modest budget will end hosting the 2020 Olympics

Debt-struck Madrid is betting its penny-pinching bid to host the Olympics in 2020 will reap rich economic dividends for recession-hit Spain. The Spanish capital is banking on a low-cost 5 billion dollars Olympic bid that relies heavily on existing stadiums to surprise Tokyo and Istanbul when Olympic chiefs make their decision in Buenos Aires on Saturday.

Spanish Olympic Committee president Alejandro Blanco: “we have the citizens’ support”

It is a tactic of necessity for the Madrid 2020 team, backed by the city, the region and the central government. Madrid has debts of 9.8 billion dollars; the wider Madrid region is in debt to the tune of 21.6 billion Euros; and Spain's overall public debt stands 923 billion Euros, equal to 88.2% of the country's entire annual economic output.

Madrid 2020 is proposing to spend 3.1 billion Euros to put on the Games, plus another 1.9 billion in construction investment. It is a modest sum compared to London 2012's estimated cost of 8.8 billion pounds, or 13 billion Euros.

Madrid says it can save money because 28 of the 35 venues already exist and only four permanent structures will be added, including an Olympic Village of 19 apartment blocks, to be built with private investment and later used as social housing.

As recession-hit Madrid residents protest health and education cuts, and with popular unease over Olympic spending already evident in Brazil ahead of Rio 2016, a costlier bid could have been difficult to sell at home and abroad.

Even when left-wings militants have named the 2010 big “the Hunger Games”, an International Olympic Committee-commissioned poll found 76% popular support for Madrid 2020 in the capital, and 81% in the rest of the country.

“Most of the investment to celebrate and organize 2020 has already been done. Madrid today, unlike other cities, does not have to turn itself upside down with works across the whole city,” said Juan Maria Gay de Liebana, economist and professor at Barcelona University.

The investment should be financed as much as possible so that payments are made in the 2018-2020 period, he said, a time when the Spanish economy “in principle” should be growing and the income from tourists and benefits from business investment would be visible.

Spanish Olympic Committee president Alejandro Blanco has said that in the seven weeks from the opening of the London Games to the closing of the Paralympics, an extra 2.6 billion pounds or 3 billion Euros entered the city.

“The investment required to have everything ready in Madrid is not affected at all by the crisis. That is why we have the citizens' support,” Blanco said.

“We are all in high spirits, we all have a good feeling about it, but we also realize that there is a vote and the result could go any way. You have to be optimistic, fight to the last and wait for the decision.”

Madrid 2020 bid organizers say hosting the Games in Madrid would provide a 3.87-billion Euro boost to the Spanish economy and generate 83,000 full-time jobs.

“I sincerely believe that the Games would revitalise the economy, though they would not be a panacea,” Madrid Mayor Anna Botella said in an interview with leading daily El Pais a week before the decision.

Whereas the Barcelona Games in 1992 had transformed the city, opening up beachfront areas that still lure visitors today, Madrid's more modest ambitions could have a slighter long-term impact, he said.

After failing to win the Games in 1972, 2012 and 2016, many people in Madrid believe it could be fourth time lucky, and they hope for a boost to a national economy that has been in recession for two years with a jobless rate of more than 26%.

14 comments Feed

Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.

1 Gordo1 (#) Sep 06th, 2013 - 02:07 am Report abuse
Gibraltar has more chance of winning the 2020 Games than “impoverished” Madrid!
2 Conqueror (#) Sep 06th, 2013 - 04:53 am Report abuse
I think not! How does it go? Cars and coaches not allowed within 100 miles so spectators will “have” to use Spanish public transport? Bring your own chair. But it will have to comply with regulations Spain has just created or you'll have to buy another “Spanish” one. Bring your own food. Spanish food is crap anyway. Probably comes from argieland. Thinking about that, all argie-produced “food” is contaminated. It can make you lose your mind. Watch out for all the Spanish “police” forces. Most of them are thugs and shoot first! How can a bankrupt state mount an event like this? Who's paying?
3 GeoffWard2 (#) Sep 06th, 2013 - 06:18 am Report abuse
Tokyo would be the 'safest'.

Istanbul has the money but proximity to the Middle East/Syria - and a rampant drug-taking culture amongst its 'athletes' further reduces its claim.
Madrid don't need a Games to be a Great Exposition based on vast new buildings. The world doesn't need an 'all singing all dancing with bells on' spectacle; it just needs good sport. The games have become a Neroesque spectacle of excess ... time to rein it in.

Japan continues to come out from the toughest economic times; the Games would help the transition, and it would do it well.
4 slattzzz (#) Sep 06th, 2013 - 07:03 am Report abuse
Get the football team to pay for it after all they can blow a 100 million euros on mr bale and pay him 300k a week for 5 yeats
5 JimHandley (#) Sep 06th, 2013 - 09:55 am Report abuse
Hello everyone,

The present-day Olympics Games is just another signal example of how we’ve allowed multinational advertisers to seduce us into letting UNFETTERED world capitalism dominate virtually every aspect of our daily lives.

The Games, for so long a TOTALLY AMATEUR event, is now just another hugely hyped-up happening for the exclusive economic benefit of the leading athletes, and above all, international big business and its so many easily bribeable minions on the International Organizing Committee. And For the Love of Riley, of what benefit to physical fitness and worldwide brotherhood, are products such as Coke? –a massively overpriced, insalubrious concoction of tap water, sucedaneous savouring substances and refined white sugar– yet our youth has become addicted to its fattening flavour.

No wonder that the world’s leading advertisers employ professional psychologists to help them brainwash their hapless victims!

So given the fabulous sums in play, it’s hardly surprising that some of our young athletes succumb to the temptation of taking drugs to enable them to make fortunes beyond the wildest dreams of their non-sporting contemporaries.

In my ‘umble view, it’s high time that the difficult task of putting the voracious beast of capitalism back into its cage, were taken seriously by the international community. But the longer this dangerous animal is left at liberty to gorge upon the weak, the stronger it will become, making its recapture ever more difficult...


Jim, in Madrid.
6 ChrisR (#) Sep 06th, 2013 - 01:28 pm Report abuse
I hope they get the games!

They will show the world what a bunch of losers they really are if they think using existing facilities and “budget” costing will work: it won't and we all know it won't.

So the spicks will be in the same sinking boat that Brasil is over the World Cup but this time it will be far worse and the effect on Spain far more damaging.

7 Be serious (#) Sep 06th, 2013 - 02:29 pm Report abuse
Apart from the train rides, Madrid would be boring.
8 slattzzz (#) Sep 06th, 2013 - 06:28 pm Report abuse
where's Madrid again?
9 GFace (#) Sep 06th, 2013 - 08:53 pm Report abuse
I love how the negative nancies have to cite the radiation risks from Fukushima to balance out points against Madrid to be “fair.” Rather like citing Godzilla and just as big an issue this long since the quake and the distance between the cite and Tokyo.
10 ElaineB (#) Sep 07th, 2013 - 05:27 am Report abuse
As someone who attended the London Olympics several times I have to say it was an incredible experience and had a hugely positive effect on the UK. I did not at any time feel overwhelmed by advertising and large corporations, it was all about the athletes. Sure it had to be paid for and why not big business, but most people are immune to 'sponsored by'.

The legacy has been the extended transport systems and redevelopment of a neglected area of East London. The athletes accommodation has been converted to long-term housing - much of it affordable - and increased interest in sports participation amongst young people here. If some of the examples of the London Olympics was transferred to other locations, the same could be achieved.

Whoever is chosen will have to demonstrate in advance they can afford it and that it will be safe. I would be happy to with any of the short-listed cities.
11 reality check (#) Sep 07th, 2013 - 07:21 am Report abuse
I hope the Japanese get the games, they have had a rough time of it lately, awarding them the games would for once bring them to the worlds attention for the right reasons.
12 GFace (#) Sep 07th, 2013 - 10:40 am Report abuse
@10 that's one of the reason that Turkey is writing an orphan with their proposal. The recent protests along with the state dept advisory on the country that landed in my mailbox yesterday irons that horse.

@11 I agree vibrant, efficient and goofily quirky Tokyo is at the top of my wish list.
13 ChrisR (#) Sep 07th, 2013 - 05:00 pm Report abuse
Well, the news is out, it's Tokyo! Bid of only USD 2.6Bn but a well structured presentation apparently.

Ah well, the spicks have got off the hook. We will just have to deal the blow some other way, but deal it we will.
14 JimHandley (#) Sep 07th, 2013 - 07:17 pm Report abuse
ElaineB et al,

Thank Gawd that we in Madrid have escaped all the hoo-ha!

Many CONVENTIONAL economists vigorously dispute the much-trumpeted profitability of holding the Olympics. The ruinous remnants of the recent Athens event are an extreme example, plain for all to see. Of course, our politicians always try to present the results of their endeavours in favourable terms. Typically, a govt spokesperson will say summat along the lines of, “THIS MONTH’S UNEMPLOYMENT FIGURES ARE BETTER”. However, usually, the REAL case is, THIS MONTH’S UNEMPLOYMENT NUMBER IS NOT QUITE SO DISMALLY BAD AS LAST’S. Therefore, perhaps it’s unwise to believe ALL the positive spin one hears about the Games.

Given strong political will, the regeneration of areas adjacent to the Olympic venues could easily be made without allowing multinational concerns to take such an enormous share of the income generated by an enterprise financed by PUBLIC monies. Why should the TAXPAYER take all the investment risk, simply to EXCESSIVELY ENRICH fat cat private shareholders who’ve done virtually NOTHING? –most of whom pay little or no tax in the countries where they accrue their vast profits. Let the transnational concerns participate if they wish, but not on such ludicrously advantageous terms!

Incidental costs not normally entered in the Games’ balance sheets are those that cover items such as:

A sharp spike in inflation –involving everything, from food to accommodation and especially hotel prices.

A temporary diminution of ‘normal’ business activity, due to traffic congestion.

A pronounced increase in criminality such as prostitution, pick pocking, street theft with physical violence, et cetera, causing a substantial increase in policing expenditure for which, the taxpayer is responsible.

And all this malarkey principally just to enable big business to extract easy money from the worldwide millions of foolish, fat bellied, beer swigging armchair sportsmen, who seated before their T.V’s, indulge th

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!


Get Email News Reports!

Get our news right on your inbox.
Subscribe Now!